Several Privatized Greek Ports For Sale to Highest Bidder

A bidding war is expected to break out for the ownership of Greek ports that are now up for sale to the highest bidder after being privatized.

The ports of Igoumenitsa, Heraklion and Patra, which are all being privatized, are the focus of attention of the Greek passenger shipping firms Attica and ANEK and Italy’s Grimaldi Group, which now holds the reins of the Minoan Lines group of ferries.

The port authority of Thessaloniki, Greece’s second largest city, is reportedly interested in purchasing the port of Heraklion, on the island of Crete.

On Thursday, Greek Prime Minister Kyriakos Mitsotakis had a meeting with shipowner George Prokopiou, the highest bidder for Skaramangas shipyard. The meeting took place at the Maximos Mansion in Athens.

Mitsotakis reportedly expressed his satisfaction with the outcome of the bidding process, stating that the Greek government places great importance on the restoration of Greece’s famed shipbuilding industry after it suffered a long period of contraction.

The PM also was said to have praised the special role played by Skaramangas Shipyards in the Greek national defense industry.

Japanese Ambassador to Greece Νakayama Yasunori visited the port of Piraeus, the largest port in Greece, which is majority owned by the Chinese conglomerate COSCO, on Tuesday.

Greek ports for sale

Piraeus Port Authority Deputy CEO Captain Weng Lin spoke to the Japanese Ambassador regarding the significant investments that have been and are being made at Piraeus, during a visit to Port headquarters.

Yasunori, who was accompanied by representatives from a number of Japanese corporations, was also given a tour of the port by the Deputy CEO.

Captain Weng spoke at length about the importance of such meetings for the port, which, as he stated, plays a major role in shipping at both the European and global level.

Greece’s Court of Audit recently approved the sale of another 16% stake in the Piraeus Port Authority to Cosco Shipping and a five-year extension for the company to complete the investment projects it has pledged to make at Greee’s ancient port.

This sale increases the stake that the Chinese behemoth owns in the Port to 67% from the current 51% majority stake.

A new contract reflecting this greatly increased ownership stake will be signed by COSCO and the Greek state in the next several days. It must then go before the Parliament to be ratified. Most likely the contract will be voted on in the first two weeks of September.

Despite not having made good on the €300 million investment program it had promised to implement within five years of its purchase of its 51% majority stake in the port, Cosco demanded that the provision in the privatization agreement be activated.

COSCO’s original stake in the port was pegged at €293.7 million.

Greece’s Court of Audit accepted Cosco’s protestations that it is not responsible for the delays in implementing the investment plan, however. It found that at least some of the problems revolved around legal matters that it had no control over, including an appeal by local people over environmental concerns which has delayed the upgrade of a cruise terminal at Piraeus.

Cosco had protested as early as November 2020 in a letter to the ministers of finance and shipping and Greece’s Asset Development Fund, that it bore no responsibility for the delays.

Greek media reports state that the updated agreement by COSCO and the Greek state involve COSCO posting letters of guarantee equivalent to 33% of the amount of the pending investments.

These letters will be called in by the Greek state if COSCO’s investments are not completed by the new deadline.

The Greek state will have a veto on strategic decisions regarding the port; however, it will only be represented by one member on the 11-member OLP board of directors in the future.

At present, it has three members on the board.

It is reported that COSCO deposited a total of €88 million in an escrow account in order to be granted its initial 16% stake in 2016.

As of now, fewer than half, or 140 million euros’ worth, of the 600 million-euro improvements stipulated for the port have been completed.